Vietnam: new investment in infrastructure sector

The infrastructure sector in Vietnam presents some excellent opportunities. The government of the Asian country, which has been experiencing remarkable economic growth for years now, has decided to invest large sums in the construction or modernization of infrastructure needed to support the development of the Vietnamese economy.Going into specifics, the Minister of Planning and Investment, Vo Hong Phuc, has estimated that $139 billion will be needed over the next five years for investment in ports, roads, railways, and airports.

The billion-dollar value of infrastructure projects from 2010-2015 was estimated as follows: US$52 billion for transportation; US$8 billion for the port sector; US$14.4 billion for roads and bridges; US$20 billion for railways and subways; and US$9.6 billion for the airport sector.

Despite progress over the past five years, investment in construction and infrastructure has not kept pace with GDP growth.This is precisely why we believe that, thanks in part to government incentives aimed not only at attracting investment, technology and know-how foreign, but to invest in the development of the sector about 9% of GDP, the scenario is extremely attractive for Italian companies willing to set foot in the Vietnamese market. The progress being made is yes slow, but steady.

According to some recent statistics, nearly 88% of foreign enterprises and 83% of local domestic enterprises describe Vietnam's infrastructure as bad; in addition, 95.6% of foreigners’ business enterprises (involved in import/export) rate the quality of Vietnam's infrastructure as absolutely bad. Today, there are about 90 projects implemented by private investors with a combined financing of $7.1 billion from various sources. Some Italian banks and companies have already begun sounding the ground consider market opportunities.

Our presence in the area ensures that we can touch upon what could be the best opportunities for foreign investors: in our opinion, the most interesting and prospectively profitable areas to date concern the construction of bridges, roads and the port sector.

In fact, the maritime sector, which can in fact count on a total of 126 port terminals and 266 piers, has several shortcomings: from poor technical equipment, to the lack of adjacent infrastructure, from the lack of integration between different means of transport to the lack of piers for large boats. As for roads and bridges, there is a continuous increase in terms of mileage to be recorded: from 96 thousand kilometers of road network in 1990 to 224 thousand kilometers in 2004; in the case of state roads, however, the increase was from 15 thousand to 17 thousand kilometers. In addition, the prime minister recently approved a plan in order to build 3,041 kilometers of highways along the coast.

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